Navigating Complexity: Major Canadian Pharmaceutical entering US Cannabis Market
Client: Major Canadian Pharmaceutical
Project duration: September - November 2016
Project category: Strategy, Interpreting & Navigating Complexity
The United States medicinal marijuana market, a $16.7B industry in 2016 is estimated to reach ~$50B by 2026. How it will get there is another question entirely. Conventional wisdom is that the entire industry will consolidate once Federal prohibition ends. But is this wisdom accurate, and how should different actors perform between now and then?
In 2017 a group of Wall Street financiers, pharmaceutical executives, and large growers, met and challenged us to “rationalize the landscape” for medicinal marijuana. Together we built a system paradigm – a map of the US ecosystem of medicinal marijuana including all the major actors and their relationships: consumers, growers, dispensaries, health care providers retailers & pharmaceuticals, technology, criminal elements, investment community and the state governments.
We were asked to evaluate the conventional wisdom of market consolidation post- prohibition. We answered this through simple simulation of the independent archetypes within the paradigm, identifying what would happen to the net revenue of key actors over time – those in the market now and those entering only after prohibition ends, and there are profound implications.
Identified system archetypes portraying market actors and their relationships
Developed system paradigm of all actors by linking archetypes together
Forecast future scenarios of market growth
Identified latent constraints, tipping points, and threshold dynamics that would accompany each scenario
Helped participants understand “how it all works together”
Able to replicate conventional wisdom from model – but also challenge it
Identified multiple forecasts that challenged conventional forecasts and how to identify each as they developed
Identified a new key-performance indicator and how to measure it